compensation

The
money payable to an owner of real estate where the real estate is
compulsorily acquired or where the provisions of a planning scheme
result in a fall in value. The Commonwealth and hence the ACT
government must provide compensation on “just terms” under the
Constitution whereas the states are not so bound. The relevant act is
the Lands Acquisition Act
1989.

Compensation
theory is well developed in Australia following a large number of
court cases this century largely concerned with the compulsory taking
of freehold land for public works. Each state has similar legislation
providing the payment of compensation based on the valuation concept
of special value to the owner. Since
the Crown is the ultimate sovereign for
all beneficial title (that is, excluding native title) it does not
have to pay any compensation for the compulsory taking back of its
land (hence the term resumption). At
state level, compensation is only paid because of special legislation
that enables its payment. The Commonwealth on the other hand, is
different as it must pay adequate compensation (just terms)
under s51(31) of the Constitution.

Australian
compensation law has developed from the Lands
Clauses Consolidation Act 1845(UK). It is
largely because of the different social and economic backgrounds
compared with the 19th Century United Kingdom, that Australian
legislation has over a long time, evolved into a more acceptable form
of compensation for Australian conditions. At the time of the UK Act,
land acquired, was mainly tenanted as the incidence of owner
occupation in mid 19th Century was very low. Land at that time
represented an investment and therefore, the consequence of
compulsory acquisition for the owner was little more than a change in
the mode of investment. Not until recently, has Australian
legislation favoured the owner occupier rather
than the investor (Else Mitchell, 1974, 2).

The
compulsory acquisition of land for public works involves the dilemma
of competing interests. On the one hand is the public need and
expectation of modern and efficient services such as roads, schools,
hospitals, and recreation facilities, and on the other hand, are
dispossessed owners who expected peaceful occupation of their
freehold land "forever". Therefore, a good compensation
system is one that:

indemnifies
private citizens as far as possible, against any loss resulting from
the compulsory taking of their land.

has uniform laws

is as simple and
as efficient as possible.

POWER
TO RESUME LAND

The
State is the Crown and ultimate sovereign, and therefore, on the
compulsory taking of land; resumes land.
That is, it takes back what it already owns. On the other hand, the
Commonwealth has to acquire land
as it does not inherently own land. The state's authority to resume
is an element of its sovereign power:

In other words, a
state passed by a sovereign parliament is equally within the legal
rights of the legislature whether it nakedly confiscates property and
takes it upon terms of payment more or less. That is the position in
the UK, and the right flows from the sovereignty of parliament, and
does not depend for its defence upon the doctrine called eminent
domain" NSW v Commonwealth (1915) 20 CLR 54, 77.

Although the
states have the power to pass laws resuming land without paying
compensation, the common law has insisted because of this great
power, that any resumption must be exercised carefully. A statute
will not be read as authorising the compulsory taking of property
without compensation unless that intention is clearly expressed
C J Bur/and v Metropolitan Meat Industry Bd (1968)120 CLR 400, 406.

THE
RESUMPTION PROCESS

There are two stages
to the resumption of land:

• the decision
making process

• the resumption
process.

THE
DECISION MAKING PROCESS

The authority
formulates its needs and policy objectives in relation to particular
public works that will require land acquisition or resumption. This
is an internal administrative matter about which most legislation is
silent. Generally, the authority has determined that the resumption
is essential to the success of the works at hand.

LAND
MUST BE TAKEN

Generally,
under Australian law, some land (no matter how little) must be taken
to allow a claim for compensation. However, in the UK and Canada,
action has been taken to sever the nexus between the acquisition of
land and a right to claim for Injurious
Affection. There have been attempts to
follow
these examples in Australia.

The
Nevill Report argued that a claim for injurious affection should be
extended to owners of property over which no land has been taken:

The committee can
see no justification for maintaining this dichotomy in Western
Australia. Compensation for injurious affection is not compensation
for land resumed (the Public Works Act provides elsewhere (s63) for
that ) it is compensation for the discomfort or inconvenience caused
by public works to neighbouring land owners: it makes no sense to
restrict the right to claim to persons who have had land resumed."
(Nevill Report (WA) 1987).

The
main
reason that this has not happened is a practical one; how far should
injurious affection extend?
However, the right to claim for any injurious
affection should be extended at least, to
the
adjoining owners.

Since
compensation is a "once only" lump sum payment, the
dispossessed owner may obtain compensation for a public work that may
never eventuate. This was the case in Commonwealth
v Morison (1972)127 CLR 32
where 22 800 was paid to M for Injurious
Affection that never eventuated because of a
change in plan.

THE
RESUMPTION PROCESS

Although the process
varies, state by state, typical steps in the resumption process are:

STEP
1. NOTICE IN GOVERNMENT GAZETTE

The
appropriate minister publishes a Notice of
Intention to resume in the Government
Gazette. The notice must at least include the place where interested
persons may inspect a plan of the land, a statement of the nature of
the work and a description of the land required. After the Notice of
Intention no person is allowed to enter into a transaction affecting
the land without the written consent of the minister.

STEP
2. NOTICE PUBLISHED IN NEWSPAPER

The minister
publishes the Notice of Intention in a local newspaper and serves a
copy on the owner and occupier, if any. The minister delivers a copy
to the Land Titles Office and registers a caveat on title.

STEP
3. OBJECTIONS

Within a certain
period (for example, 30 days) any person with an interest in the land
can serve the minister with written objection to the proposed
resumption. The minister may allow the objector to make
representations.

STEP
4. CANCELLATION

After
hearing the objections and if the minister agrees, the Notice
of Intention can be cancelled or amended in
the Government Gazette.

STEP
5. DECLARED RESUMED

Where
no
objections are received or the objections are not sufficient to make
the minister change his/her mind, the land is declared
resumed for the relevant public purpose by a
further notice in the Government Gazette. Such notice can be annulled
or amended within a certain period for example, 90 days.

Immediately the land
is vested in the Crown (upon gazettal) all existing estates or
interests are converted into claims for compensation. Therefore, the
Crown obtains a "clean" title.

STEP
6. SERVICE OF NOTICE

The
minister must serve on the owner(s) of the land and occupier(s), a
copy of the Notice of Resumption.